PERA Growth Bolsters Philippines' Long-Term Savings Pool

MANILA, Philippines — The Personal Equity and Retirement Accounts (PERA) in the Philippines are rapidly expanding, widening a channel for long-term domestic savings that can support businesses and infrastructure, although the voluntary retirement program remains in its early stages despite its significant increase in contributors. Presidential Legislative Liaison Office secretary Joey Salceda stated that retirement savings also serve as development capital, with PERA funds capable of financing bonds, equities, infrastructure, and business expansion, while simultaneously providing Filipino workers with greater security in their old age. Data from the Bangko Sentral ng Pilipinas (BSP) reveals a surge in PERA contributors, increasing by 385.3 percent to 30,055 as of end-June from 6,193 a year earlier. Cumulative contributions also saw a 36.7 percent rise, reaching P757.6 million from P554.1 million. PERA, established under Republic Act 9505, is a voluntary savings and investment account designed to supplement pensions from the Social Security System (SSS), Government Service Insurance System (GSIS), and employers. Contributions can be invested in accredited financial products, with qualified savers benefiting from tax incentives. Government policies have been geared towards making the PERA program more accessible and encouraging companies to assist employees in building retirement funds. Under the Capital Markets Efficiency Promotion Act, qualified private employers can claim an additional tax deduction equivalent to 50 percent of their actual contributions to employees’ PERA accounts. The BSP has also enhanced digital access to PERA and recently permitted bank time deposits as eligible investments, offering conservative savers access to a familiar, tax-exempt product within a PERA account. Despite its rapid expansion, PERA is still at an nascent stage when compared to the country’s broader savings base. Data from the Philippine Statistics Authority indicated that gross national saving reached P8.4 trillion in 2025. BSP Governor Eli Remolona Jr. recently told senators that raising the national savings rate is part of the long-term response to the country’s external imbalances. He noted that dollar earnings from overseas Filipino remittances and the business process outsourcing industry are insufficient to offset money flowing out of the economy, and that when the Philippines invests more than it saves, the difference must be financed through borrowing or foreign investment, creating a structural need for foreign currency and potentially adding pressure on the peso. Jonathan Ravelas, senior adviser at Reyes Tacandong & Co., supported Remolona’s assertion that savings are crucial for economic resilience, stating, “Saving is not just a personal financial habit, it’s an economic strategy. A nation that saves more builds resilience, creates capital for investment and is better prepared for shocks.” However, he also emphasized that saving alone is insufficient, and households must also spend wisely, invest in education and skills, support local businesses, and hold institutions accountable. Meanwhile, Geronimo Law cautioned against placing the burden of the country’s external imbalance on ordinary consumers, arguing that much of household spending is on inelastic essentials, not consumer luxuries.